Federal judge should appoint a receiver to take over PG&E

A security guard stands behind barricades near an entrance to a Pacific Gas and Electric Company building in San Francisco. The company, the state’s largest utility, filed for bankruptcy protection on Jan. 29, 2019.

Photo: Jeff Chiu / Associated Press

A federal judge overseeing PG&E’s criminal probation should appoint a court receiver to take over PG&E’s operations. Just as an inmate loses control of decision-making while in prison, PG&E Corp. and its utility Pacific Gas and Electric Co. should lose the authority to make operational and financial decisions. A receiver, who could make those decisions and have the power to replace corporate board members and senior executives, would give the corporation and its subsidiary a chance to change course.

If we’ve learned anything over the past few years, it’s that we cannot trust the corporation’s management with the responsibility for this vital service.

Such an action will give PG&E customers what we want and need: to keep the lights on, to keep electric rates affordable and to keep California on the path to 100 percent renewable energy. The system of oversight by the California Public Utilities Commission clearly hasn’t been enough to do that, and PG&E’s bankruptcy strategy certainly won’t.

Unlike federal bankruptcy court, where the focus is creditors, criminal court could exert enormous power over critical safety operations at PG&E. It could focus the company’s attention on customers.

In a proposed order imposing new controls over PG&E’s safety inspections, U.S. District Judge William Alsup attempts to do just that, citing as evidence that PG&E has violated the terms of its probation:

The falsification of thousands of inspection records of gas pipeline during the past four years and,

Findings by California Department of Forestry and Fire Protection in 12 different wildfires that PG&E should be criminally prosecuted.

Violating probation is pretty serious business. Most criminals who get caught committing another crime are likely to serve the remainder of their probation behind bars. Most criminals that is unless you are a corporation like, say, PG&E. What is the best way to stop a repeat offender when you can’t put a corporation in jail?

Judge Alsup would require PG&E to inspect its entire electrical grid between now and June, and to turn off power to a service area if the company can’t show the lines are safe.

While there’s a lot to like in the judge’s proposal, the final order will probably take into account the difficulty of rushing inspections of thousands of miles of poles and wires, the environmental harm of giving PG&E license to cut down trees without restraint, and the public safety threat of blackouts for people who depend on electricity for life-saving medical equipment.

The judge’s message to the company however is clear: Take responsibility for running your system safely in accordance with our state’s laws and climate goals.

And yet, something important is missing. While we may not be able to put a corporation in prison, we can deprive a corporate criminal of many privileges.

In order to protect the public, deter similar wrongs by other utilities, and aid in the rehabilitation of the offender, the court could also:

• Prohibit PG&E from making campaign contributions. Just as prisoners lose political rights, PG&E should lose the privilege of using its profits to influence elections and purchase political good will.

• Suspend PG&E from lobbying at the state Capitol. Again, like a prisoner denied the vote, PG&E, if convicted of lying to federal authorities, should not be allowed to register lobbyists. Besides, wouldn’t the $9 million spent on lobbying expenses in 2018 have been better spent by inspecting more power lines?

While it may not be physically possible to jail a corporation, the tepid sanctions to date have clearly failed to get the attention of PG&E’s board of directors and top management. It’s high time to treat the company like the recidivist it is.

Customers are crying out for relief from the threat of PG&E’s negligence and its costs, and should continue to do so. While ratepayers may not have a formal role in these legal proceedings, our interests and our safety should be at the forefront in any venue. We are the ones with the most at stake.

Mark Toney is executive director of TURN, The Utility Reform Network, a statewide nonprofit that advocates for fair rates and safe, reliable utility service in California.